In Oct. 2022, Shopify (SHOP) posted only two cents a share in losses in the third quarter. This rekindled a strong rally in SHOP stock. Shares surged again when the company hiked prices sharply.
Markets did not interpret the fee hike as a need to raise cash flow. Instead, it saw that shop owners would not leave the platform as a bullish sign. Shopify will now charge $39 a month for the basic plan, up from $29. The Shopify plan will rise to $105, up from $79. The highest tier plan will rise from $299 to $399.
COO Kaz Nejatian said that the company did not change the prices for access to its best tools for the last 12 years.
Shopify earned higher fees. Before the technology stock market crash, it invested billions to build back-end delivery logistics.
Risk
Shop owners running on Shopify’s platform may cancel their service. Small business owners that barely break even cannot continue operating at a loss. Those who are still thriving despite the pressures of inflation will pay the fee increase. They may also switch to an annual plan to lock in rates.
Shopify will likely hold its stock surge. Unless the markets panic sell, the stock probably bottomed months ago.
